Baltimore Convention Center expansion: Questions remain

The Greater Baltimore Committee's idea for an expansion of the downtown convention center coupled with a new, attached arena and expanded Sheraton hotel tower is generating understandable excitement among the group's leaders. It would solve a number of downtown Baltimore's issues at once, come with a major commitment of private financing, and boost the city's lucrative tourism industry. GBC President Donald C. Fry said this week that he expects the feasibility study being conducted by the Maryland Stadium Authority will support the project and that his group will ask the General Assembly to approve $2 million to $3 million in planning money next year. He may well be right, but we need first to make sure that the feasibility study and our elected officials are asking the right questions about this project.

The idea of a major convention center, arena and hotel all under the same roof is unique among American cities, and that could make it a particularly powerful combination for Baltimore in the hunt for convention business. It also makes it hard to judge its value. Boosters of the plan say that having an 18,000-seat arena attached to the convention center would enable Baltimore to compete for much bigger meetings than it gets now. Gatherings that include a marquee speaker or a large plenary session might be attracted by the presence of an arena that can be entered directly from the convention floor. Those who book meetings might also be lured by the possibility that a concert or sporting event could be going on at the same time as a convention, a perk that could improve attendance. That's the theory, and it sounds good. But we need some objective way to check whether it's valid.

The proposal's backers point out that Baltimore's convention center is rapidly slipping in the rankings of such facilities as other cities expand their own convention centers. Without an expansion and renovation, they say, the city will lose out on more business. Already, according to Visit Baltimore President Tom Noonan, Baltimore missed out on 112,000 room nights in fiscal 2011 alone because its convention facility was too small.

Tourism is a $4.4 billion annual industry in Baltimore, so the idea that we would be surpassed by other cities is one to be taken seriously. But we also need to consider whether continued expansion of the convention center is a game of diminishing returns. Are cities just creating more and more space to chase the same convention dollars? We need to know whether this proposal would give Baltimore a lasting advantage or if we would quickly find ourselves surpassed again by some other city. If the convention business is turning into a perpetual arms race, we need to consider whether it remains a good investment or whether there are other opportunities for economic development that make more sense.

Baltimore has a unique issue to consider in that the city has financed the construction of another convention center hotel, the Hilton, which cost more than $300 million to build. So far, it has been reasonably successful — crucially, it has been able to service the debt on the bonds that paid for its construction without having to ask the city for help. But the proposal to expand the Sheraton needs to take into account how much impact, good or bad, the project would have on the Hilton's ability to pay its bills.

One of the most attractive aspects of the GBC's plan is the commitment by developer Willard Hackerman to assemble private financing for the arena and hotel expansion, expected to cost $500 million, if the city and/or state funds the $400 million for the convention center expansion. Mr. Hackerman certainly has the stature, experience and wherewithal to make that happen. But we need to know the details. Will he and his partners seek incentives or tax breaks from the city as part of the deal? How will that impact the overall financial viability of the project?

No question, the GBC's idea is attractive. It is bold, yet it fits within the existing framework of downtown. But it is still a major commitment, and we need assurance that the Stadium Authority's study of the proposal, which is being conducted by a Florida consultant, is thorough and skeptical, and that our elected officials will ask tough questions about it. This may turn out to be a once-in-a-generation opportunity for Baltimore, but we have to be careful not to let excitement get in the way of careful judgment.